Hybrid Business Model: How to Finance Your Own Non-Profit Work

Eco Femme is a social enterprise for female hygiene products. The hybrid business model combines both for-profit interests and non-profit social work: With the commercial gains from selling re-usable cloth pads the all-female team based in the intentional township of Auroville, South-India, finances their non-profit activities in education and research. When I met Jessamijn Miedema , Co-Founder of Ecofemme & For-Profit Team Leader, I was fascinated by her fresh views on the meaning of being an entrepreneur. She and her team are truely a change-makers in both the social and economic spheres of our world.

You are using a hybrid business model. Why did you choose to use it instead of running a classical for-profit company or a traditional non-profit organization?

Our drive is to create social and environmental change. A social enterprise with a hybrid business model is for us the most independent model: the steady income from commercial sales allows us to finance and form our educational programs the way we believe they should be. It gives us flexibility to adapt to our learning.

We are not dependent or do not need to adjust to the moodswings in development community to get grants. The direct connection between education and commercial sales gives us extra motivation to grow commercially, which is a very real and important drive in our team.

As a part of the hybrid business model, we have developed a buy-one-give-one program. For every pack of pads bought, this modality allows us to give one pad to a girl in India. We club 4 donations together to form a kit. During menstrual health education sessions we hand out those kits. These donations largely fund our Pad for Pad program. Also: they connect women around the world to grow what we like to think of as eco-sisterhood. These donations are one of the ways in which we can support each other in taking care of our bodies and the earth.

Further, the hybrid business model allows us to cross-subsidise pads for women who can not afford washable cloth pads at a commercial price (Pads for Sisters program).

The growth and success of these two programs are in our own hands.

What is sometimes challenging with a new business model like the hybrid one?

Overall the hybrid business model is giving us strength in relationship to others. Its financial sustainability and independence are often appreciated (across entrepreneurs, customers and donors) as a very tangible expression of the value-base and integrity of the organisation.

One challenge we face is that (in India) the social enterprise and hybrid business model does not have a standard legal form. You are either a not-for-profit or you are a for-profit, not a strange mix of the two. Therefore it has not developed mainstream approaches to accounting. This grey zone is more complex, you have to find your own way in this.

More directly related to the hybrid business model is that our outreach to girls and women is limited to our commercial growth. For us this means that apart from growing the business, we are also looking at other ways to scale up; we see the need for collaboration with and support to others who also want to work in this field, and grow a movement.

Do your non-profit contacts sometimes question your integrity?

Haha, maybe they do, but they never told us that! No, I think our entire team is so clearly dedicated to the cause that that would be very difficult to happen.

Non-disposable products by nature don’t need to be purchased on a regular basis. How profitable is a business with re-usable products?

True, it is not so easy and I think it means a slow start. We largely rely on users that are enthusiastic (for whom the switch to re-usables was sometimes life changing) and are spreading the word on washable cloth pads. The internet has made it easier for a project and product like ours to reach out through online shops and social media. It allows retailer shops to have a larger geographical customer base. That is particularly important to these sustainable, slow-moving alternative products.

Re-usable female hygiene products seem to become more popular. How do you feel about the increasing number of competitors?

The growth of pad makers makes me feel proud! More and more people are caring, find it problematic how we are relating to ourselves and to the environment. We are with so many bleeding people in the world, we need to make more noise to reach out to them and make change happen.

Imagine the market is saturated one day. What will you do if re-usable products don’t sell anymore?

Wow! I will have a second cup of coffee.

What would you pass on as an advice to young entrepreneurs who are thinking about starting a hybrid business?

Do it! Ask for support, ask people to join you. The collaborative, co-creating space that we work in has been one of the biggest gifts in my working life. To be able to have so much fun and freedom with a group of people who all believe in making change happen is extremely rewarding.

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Welcome to Student of the World

Silke, author of Student of the World

Hi! My name is Silke Bettina Oppermann. I have been exploring Today's Solutions for Tomorrow's World in Africa, Asia and Europe. That includes innovative decision-making tools, technologies, new economic paradigms, eco-villages, intentional communities and much more. The aim of this non-profit blog is to spread the word about forward-looking ideas. Enjoy reading...